To the Members of Kerala Ayurveda Limited
Report on the Audit of the Standalone Financial Statements.
1. We have audited the accompanying standalone financial statements of Kerala AyurvedaLimited (the Company) which comprise the Balance Sheet as at March 31 2019 the Statement of Profit and Loss (Including other Comprehensive Income) the Cash Flowstatement and the statement of changes in equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (Act) in the manner so required and give a true and fair viewin conformity with the accounting principles generally accepted in India including IndianAccounting Standards ('Ind AS') specified under section 133 of the act of the state ofaffairs (financial position ) of the Company as at March 31 2019 and its profit(financial performance including other Comprehensive Income) its cash flows and thechanges in equity for the year ended on that date.
Basis of Opinion
3. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India ('ICAI') togetherwith the ethical requirements that are relevant to Our audit of the financial statementsunder the provisions of the Act and the Rules there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.
Key Audit Matters
4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements for the financial yearended March 31 2019. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. We have determined the matters describedbelow to be the key audit matters to be communicated in our report.
|Key Audit Matter ||How the Key Audit Matter was addressed in our audit |
|Refer to note 2.f 'Inventories' to the standalone financial statements. The total value of inventory as of March 312019 amounted to Rs. 1075 lakhs representing 12.34% of the total assets (2018: 996 Lakhs 9.96% of the total assets). Inventories are measured at the lower of cost and net realisable value on FIFO basis . The valuation of inventory is dependent on establishing appropriate valuation controls. We focused on this area as Management judgement is applied to estimate the appropriate write-down for obsolete inventories and the indirect production costs manually capitalised as inventory. These judgements are key elements in the valuation of inventories. ||We have performed the following principal audit procedures in relation to Inventory valuation: |
| We tested relevant internal controls that the Company uses to ensure proper valuation of inventory including the procedures for write-down of obsolete inventory and the indirect production costs manually capitalised as inventory. |
| We tested the adequacy of write-downs for excess and/or obsolete inventory by verifying future demand data historical usage historical accuracy of write-downs and management's plans to utilise the inventory. |
| We evaluated the significant judgements and estimates made by Management in applying Company's accounting policy in relation to indirect production costs. |
| We assessed the Company's disclosures in the financial statements in respect of inventory. |
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
5. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management report Chairman'sstatement Director's report etc but does not include the standalone financial statementsand our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
6. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the state of affairs (financial position) profit orloss ( financial performance including other comprehensive income) changes in equity andcash flows of the Company in accordance with the accounting principles generally acceptedIn India including the Indian Accounting Standards specified under section 133 of the Act.This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
7. In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
8. Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the standalone Financial Statements
9. Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith Standards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these standalone financial statements.
10. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. we also:
Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existsWe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern and
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
11. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
12. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
13. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditors' report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
14. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of section 143 of the Act we give inthe Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order tothe extent applicable.
15. Further to our Comments in Annexure A as required by section 143(3) of the Act Wereport that:
a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;
b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books
c. The standalone financial statements dealt with by this report are in agreement withthe books of account
d. In our opinionthe aforesaid standalone financial statements comply with Ind ASspecified under Section 133 of the Act
e. On the basis of the written representations received from the directors and taken onrecord by the board of directors none of the directors is disqualified as on March312019 from being appointed as a director in terms of Section 164(2)of the Act.
f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure B.
g. In our opinion the managerial remuneration for the year ended March 312019 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;
h. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
I) the Company does not have any pending litigations which would impact its financialposition
ii) the Company does not have any long-term contracts requiring a provision formaterial foreseeable losses.
iii) The Company does not have any amounts required to be transferred to the InvestorEducation and Protection Fund.
| ||For Biju George & Co |
| ||Chartered Accountants |
| ||Firm's Registration No 007920S |
| ||Sd /- |
| ||Biju George |
|Place: Bengaluru ||Proprietor |
|Date: May 29 2019 ||Membership No 206233 |